When Debt-Ceiling Politics Was Bipartisan

Stephen Mihm, an associate professor of history at the University of Georgia, is a contributor to the Ticker. Follow him on Twitter.

President Barack Obama is hardly the first president forced to play debt-ceiling politics.

The
debt ceiling is a cap on the amount of total debt the U.S. government
can incur to pay the country’s bills. Before the 20th century, there was
no ceiling on the total amount of debt. Instead, Congress set limits on
the amount of debt the Treasury
could borrow for discrete purposes: a war or a public-works project.
Congress also set limits on the kinds of debt the Treasury could issue
for any given purpose (for example, short-term borrowing versus
long-term bonds).

Whenever the Treasury exceeded the statutory
limit for borrowing connected to specific spending, Congress had to vote
to raise the limit. As government grew and became more complicated, the
bond issues multiplied, and the votes became more frequent and
nettlesome. The ad-hoc approach to debt was, in many people’s eyes,
becoming impractical....